The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. To wit, the Armstrong World Industries, Inc. (NYSE:AWI) share price is 72% higher than it was a year ago, much better than the market return of around 22% (not including dividends) in the same period. So that should have shareholders smiling. However, the stock hasn't done so well in the longer term, with the stock only up 3.9% in three years.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Armstrong World Industries was able to grow EPS by 21% in the last twelve months. The share price gain of 72% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Armstrong World Industries has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Armstrong World Industries will grow revenue in the future.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Armstrong World Industries' TSR for the last 1 year was 74%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
It's good to see that Armstrong World Industries has rewarded shareholders with a total shareholder return of 74% in the last twelve months. That's including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Armstrong World Industries that you should be aware of before investing here.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
株式投資の一番簡単な方法は、上場投資信託を購入することです。しかし、優良株を選んで投資することで、簡単にリターンを大幅に上げることができます。その良い例が、Armstrong World Industries, Inc.(NYSE:AWI)のシェア価格です。1年前に比べて72%高い水準を維持し、同じ期間における市場リターン(配当を除く)の22%よりもはるかに良いです。よって、株主は喜んでいるでしょう。ただし、同株の長期的な成長率は芳しくありません。過去3年間において、この株が成長したのは3.9%にすぎません。
ある株の全株主リターンと株価リターンを考慮することは重要です。株価リターンは株価の変化のみを反映しますが、TSRには配当の価値(再投資された場合)、割引された資本調達や分割利益などの利益が含まれます。寛大な配当を支払う企業の場合、TSRは株価リターンよりもはるかに高くなることがあります。実際、Armstrong World Industriesの最近1年間のTSRは74%で、前述の株価リターンを上回っています。これは、主に配当支払いの結果です!
Armstrong World Industriesが、直近12か月間に株主に74%の全株主リターンを提供したことは素晴らしいことです。これには配当金が含まれます。1年間のTSRが5%であるのに対し、5年間のTSRは5%という結果が出ています。株価の勢いが強いため、この株をよく見る価値があります。しかし、ビジネスパフォーマンスの代理として、株価の長期トレンドを見ることは非常に興味深いことですが、実際には他の情報も考慮する必要があります。例えば、ここに投資する前に知っておくべきArmstrong World Industriesの警戒すべき1つの兆候があります。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。